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Depreciating in the foreign exchange market

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Reference no: EM131355228

Suppose there are two countries in the world, U.S. and Japan. If the Fed wants to fix the exchange rate, the Fed can buy U.S. dollar/sell Japanese yen to prevent dollar from depreciating in the foreign exchange market. Therefore, if the Fed wants to prevent dollar from appreciating, the Fed can

A. buy Japanese yen.
B. sell U.S. dollar.
C. buy U.S. dollar.
D. both A and B.
E. both A and C.

Reference no: EM131355228

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